Avexa buys HIV drug for trial

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Stockmarket newcomer Avexa plans to raise an estimated $10
million from new and existing investors, after buying a mid-stage
HIV drug that it intends to take into a clinical study involving up
to 100 patients.

Shares in the drug developer rose more than 11 per cent
yesterday on news it would take the licence for a drug with
promising clinical trial data from British-based Shire
Pharmaceuticals.

The deal catapults Avexa, whose own anti-infectives are in early
development, to the ranks of Australia's more advanced
biotechnology players, such as ChemGenex and Metabolic
Pharmaceuticals.

Avexa chief Julian Chick said the drug - codenamed SPD754 and
designed to treat patients who have shown a resistance to
traditional therapies - would reduce the risk to shareholders and
potentially generate significant revenue should the drug make it to
market.

Under the deal, Avexa will be responsible for the drug's
development and will receive the rights to market it worldwide,
except in North America. It will not be required to pay its partner
milestone fees.

Shire will retain US and Canadian marketing rights, and both
companies will be entitled to reciprocal royalties on eventual
sales. Shareholders will be asked to approve a $2 million equity
issue to the British company, which opted to license out SPD754 so
it could focus on its core therapeutic areas of the central nervous
system and gastrointestinal and renal diseases.

The drug was recently put through a 63-patient clinical study,
which recorded success in reducing levels of HIV in the blood. Dr
Chick said two doses of the drug had been tested and both had
returned a statistically significant result, indicating that there
was at least a 95 per cent likelihood that the viral load reduction
could be attributed to the drug. All patients, except those taking
the placebo, had shown reduced levels of viral load.

Avexa, which was last year demerged out of Amrad, has asked
Wilson HTM Corporate Finance to help raise the money to pay for the
phase IIb trial, which will start soon at an expected cost of
$6-$14 million.

Because the company listed less than a year ago, it is required
to release a prospectus, which will likely include further details
about past clinical trials and the planned structure of the phase
IIb study. Market analysts suggested Avexa would aim to raise about
$10 million. The shares closed 2.5¢ higher at 25¢.